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Statehouse Casino Debate Pits Owners Against Each Another, Neighboring States

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John Wardell
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https://www.flickr.com/photos/johnwardell/80125882

Rising Star Casino Resort, located in the Southeastern corner of the state, was the first Indiana riverboat in the region. At its peak, the casino earned $160 million dollars per year.

But CEO Dan Lee says those days are gone.  Last year the casino only took in $60 million.

“This was built here as the first casino in the tristate area," Lee says. "It made a lot of money in those days. We’re sitting here now with it, trying to cover the payroll.”

The casino’s profits started declining in 2006. Now, Rising Star ranks dead last amongst the state’s casinos. On a tour, Lee surveys the riverboat.

“This is, this is fanciful. Now, we’ve got some light bulbs out here. Cliff is trying to find a cheaper way to fix all of those … It needs a little help, but it’s not unattractive. And so we’re looking at it and saying, OK, we can fix this," he says.

In 2014, Indiana’s 13 casinos and racinos brought in $650 million in tax revenue – the lowest since 2002.

This legislative session isn’t the first time lawmakers have attempted to alleviate that burden through legislation.

“Anything we do, if people think we are going to have revenues back to where they once were, is long gone. We have to look at, can we stop the free fall over the past couple of years," says Rep. Tom Dermody (R-LaPorte), the chairman of the House Public Policy Committee. He's the author of a bill that would allow riverboats to build on-land within their footprint and authorize live dealers at the state’s racinos.

The state legislature rejected these proposals in the past after high profile Republicans, such as Governor Mike Pence and Speaker Brian Bosma, labeled them an expansion of gaming. Dermody says the only thing his bill expands is the industry’s ability to compete.

“We’re just addressing things that are currently being done in a different manner. We’re not talking about adding boats or land base. We’re talking about switching out facilities," Dermody says.

The bill’s co-author, Rep. Terri Austin (D-Anderson), says the provision for live dealers at the state’s racinos isn’t an expansion of gaming, but an exchange that could create 600 jobs.  

“Which brings people to work, brings in income tax, helps Indiana pay down its unemployment tax," she says.

The legislation aims to give Indiana casinos the necessary tools to compete with surrounding states. However, some casino owners argue that allowing live dealers will lead to more competition among Hoosier casinos.

Dan Lee of Rising Star says the one competitive advantage his casino has over the racinos in Anderson and Shelbyville are live table games.

“[A] Significant chunk of our revenue also comes from Indiana behind us. And we’re trying to figure out how to compete and bring more people from Kentucky and Ohio," Lee says. "But if we all of a sudden get ambushed from behind, meaning Shelbyville, it’s like I can’t fight a battle both directions.”

The addition of slot machines in 2008 and electronic table games in 2010 at Indiana racinos have taken a large portion of business away from Rising Star and French Lick casinos.

French Lick President Steve Ferguson says his resort’s revenues have dropped $30 million since the racinos became involved in the gaming industry. Ferguson says there are only so many gamers in the middle of the state, so new legislation will only complicate the issue. 

“If you’re going to do something that will hurt me, leave it the way it is. If you’re going to start doing things that moves gamers around and away from French Lick, then I think I need help," Ferguson says.

Legislation in the past has attempted to help smaller casinos by lowering their tax rates. But, this bill doesn’t include any measures to specifically reduce the impact on these smaller casinos.

Dermody says those provisions could come later, but this bill is about equipping all casinos.

“It’s looking at it from an industry perspective and trying to help the industry versus help one or the other," he says.

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